China’s traditional northeastern industrial heartland is on course for a revival in its fortunes as local governments take measures to restructure the local economy through upgrading heavy industry and cooperating with more developed coastal provinces.
A number of high-tech companies from coastal provinces are fueling the region’s restructuring drive, supported by local policy support and government plans to connect coastal regions with the northeast.
In 2017, the National Development and Reform Commission released guidelines calling on the northeastern region to learn from the experiences of southern provinces and take steps to attract more investment.
Hytera Communications, a leading provider of innovative land mobile radio communications solutions based in Shenzhen, Guangdong province, is one of the high-tech companies which has moved its research base from the warm southern climes of Shenzhen to Harbin, where the temperature often drops to -10 C in the winter.
Song Qintao, the company’s assistant manager, said: “We chose to establish the research base in Harbin because the costs of building it there were much lower than in Shenzhen.”
Referring to the nearby Harbin Institute of Technology, one of China’s best engineering institutes, he said: “We can recruit some of the best young talents here.”
The institute’s proximity has provided a unique source of expertise, with a large proportion of Hytera’s employees in Harbin having graduated from it.
In the next two years, the company plans to expand its research team, increasing the payroll from 600 to 1,000, and generate 2 billion yuan ($289 million) in output.
Apart from attracting newcomers, local governments have been striving to help long-established enterprises to upgrade, finding new growth momentum to improve the local economic structures, as the region is home to many of China’s largest manufacturers of automobiles, aircraft and machine tools.
A senior official with the development and reform bureau in Daqing, Heilongjiang province, said: “The nation aims to move toward a more sustainable development model, and we do not want to be left behind.”
“The idea is to make the best of our advantages and find new growth points,” the official added.
For instance, the local government has been striving to improve Daqing’s business environment with measures such as tax incentives and lower rents.